A team of 5 people must deliver 260 hours of work within a single 40-hour week. Regular hours are used first; any remaining hours are worked as overtime paid at 1.5× the base rate of $50/hour. What is the overtime cost incurred?

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Accepted Answer

$4,500. Regular capacity = 5 × 40 = 200 hours, so overtime = 260 − 200 = 60 hours. Overtime rate = $50 × 1.5 = $75/hour, giving 60 × $75 = $4,500. Distractor $3,000 uses the base rate without the 1.5× premium, and $19,500 mistakenly applies overtime to all 260 hours.

A team of 5 people must deliver 260 hours of work within a single 40-hour week. Regular hours are used first; any remaining hours are worked as overtime paid at 1.5× the base rate of $50/hour. What is the overtime cost incurred?

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